EU Summit Reaction: Sum of the Parts is No Greater than the Whole

After 11 hours of negotiating behind closed doors, eurozone leaders emerged in the wee hours of the morning on October 28th to announce that they had agreed a series of principles.

The markets rebounded later that day as everyone breathed a collective sigh of relief that at least the EU summit hadn’t ended the same way an Italian parliamentary meeting had earlier that day, in a fist fight. EU leaders found agreement on Greece, bank recapitalizations and a leveraged EFSF as I expected.

As investors and analysts begin to dig into the details of the communiqué, a number of gaps will emerge in the plan, indicating it is nothing close to the “comprehensive solution” to the crisis originally promised.